Cyprus Opts for LNG Terminal for Offshore Gas
Energy Minister Neokles Sylikiotis has announced the Cypriot preference for the creation of an LNG terminal regarding the exploitation of the offshore gas reserves.
During a presentation during the 2012 Cyprus Natural Gas Conference, Sylikiotis mentioned that major energy companies, together with financial and infrastructure players, have have already expressed their willingness to consider funding such investment.
The Minister added that over the coming weeks, the Cypriot national hydrocarbon company will push forward a previous agreement with Massachusetts Institute of Technology for a research program that will evaluate the economic potential for natural gas exploration. MIT professors will visit Cyprus and establish a liaison research team.
"We have now a clear image of the data for natural gas and our aim is to proceed with caution in exploiting the energy resources of Eastern Mediterranean for the benefit of all nations involved. Cyprus has the opportunity of becoming a regional energy hub and be the bridge of peaceful cooperation between neighboring states," commented Sylikiotis.
As a first step, Cypriot energy authorities have already decided to construct a sub-water pipeline that will transfer the gas to the Island, along with an LNG terminal, most probably in the Vasiliko region.
The local market will also shift towards the use of gas from oil presently, with smaller pipelines to deliver gas to every urban center of Cyprus for household consumption and electricity production. In parallel, Cyprus will push forward the trilateral agreement with Greece and Israel for the EuroAsia electricity interconnector, which Cyprus hopes will be operational by 2016.
Cypriot governmental authorities are closely in touch with Noble Energy and a series of agreements are being prepared in order to establish the conditions under which gas will reach the international markets.
Sylikiotis commented: "Regarding the second round of exploration licenses, the process is developing fine and has surpassed our expectations."
According to officials from the Greek company DEPA, it is estimated that a Greek delegation will visit Cyprus in July to sign a preliminary deal regarding future imports from Cyprus to Greece.
DEPA still insists for a sub-water pipeline from East Mediterranean to Greece in order to revive its ITGI plan, although it will now has to consider what the prospects of an LNG terminal would be with its involvement as well.
The cost of the LNG terminal and the necessary infrastructure works is estimated upto USD 10 Billion. All available information points to Cyprus relying upon Noble Energy to secure the participation of a major entity that will finance this project.
Sylikiotis is presently visiting Israel to hold talks with governmental officials, including Minister of Trade and Industry, Shalom Simhon, Minister of Energy Uzi Landau and the Minister of Foreign Affairs, Avigdor Liberman.
According to Greek and Cypriot media, these meetings on Israeli co-operation, will be crucial in order to assess the probabilities of an LNG investment moving forwards.